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Sentiment Update: A Somewhat Shocking Discovery

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Sentiment Update: A Somewhat Shocking Discovery: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Sentiment Update: A Somewhat Shocking Discovery

Futures are little changed following slightly disappointing economic data overnight.

EU and UK flash PMIs underwhelmed as the EU Services PMI declined to 50.7 vs. (51.5) while the UK Manufacturing PMI dropped to 46.4 vs. (E) 48.5, underscoring the economic headwinds facing the EU and UK.

Today focus will stay on economic data and the two key reports are the Flash Manufacturing PMI (E: 51.3) and Flash Services PMI (E: 53.0).  Markets will want to see in-line to slightly weak readings but most importantly, no big jumps in the price indices like we saw in Empire and Philly earlier this week.

Other notable events today include Existing Home Sales (E: 4.16 million) and Consumer Sentiment (E: 68.0) as well as two Fed speakers:  Jefferson (11:30 a.m. ET) and Daly (11:30 a.m. ET).

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Lowering Energy Prices To “Combat Sticky High Inflation”

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Lowering energy prices to combat sticky high inflation: Tyler Richey Quoted in Morningstar

Oil prices end lower as U.S. crude supplies climb for a third week in a row

A Russia-Ukraine ceasefire, or end of the war, could be bearish for oil if Trump, who is adamant about lowering energy prices to “combat sticky high inflation” pushes for an immediate removal of all sanctions on the Russian energy industry, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Also, geopolitical stability may “largely extinguish the still simmering ‘fear bid’ in the oil market.”

The market’s reaction to the CPI data underscored that “higher-for-longer Fed policy is becoming increasingly likely in 2025,” Richey said. “That ultimately raises the risk that restrictive rates choke off growth and tip the economy over a fragile edge into a recession, a historically demand-crippling phase of the economic cycle for oil and refined products.”

Also, click here to view the full MarketWatch article published in Morningstar on February 12th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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Hard Landing/Soft Landing Scoreboard

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Hard Landing/Soft Landing Scoreboard: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard
  • Empire State Manufacturing Survey Takeaways

Futures are modestly lower as investors digest fresh tariff threats from President Trump and more “hot” inflation data out of Europe, both of which are driving global bond yields higher.

Economically, China’s House Price Index fell -5.0% in January rekindling concerns about the nation’s housing sector while UK CPI was 3.0% vs. (E) 2.8%, up from 2.5% in December, stoking inflation fears and adding upward pressure to bond yields.

Today, there is one economic report to watch: Housing Starts (1.397M) before the January FOMC Meeting Minutes will come into focus in the afternoon (2:00 p.m. ET).

There is also one Fed speaker but not until after the close: Jefferson (5:00 p.m. ET) while we will get a few noteworthy (but not likely market-moving) earnings releases from ETSY ($0.95), CVNA ($0.32), and TOST ($0.06).

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Where Do We Stand With Tariffs?

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Where Do We Stand With Tariffs?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Where Do We Stand With Tariffs?
  • Weekly Market Preview: Tariff Threats Remain Centerstage
  • Weekly Economic Cheat Sheet: Stagflation Risks Turn Investor Focus to Fed Meeting Minutes

Stock futures are higher despite a rise in global bond yields thanks to growing fiscal concerns in Europe and hawkish commentary from the Fed’s Waller over the long weekend.

Economically, U.K. jobs data from January was solid while the German ZEW Survey was better than expected which added upside pressure to global yields overnight.

Looking into today’s session, there are two economic reports to watch this morning: Empire State Manufacturing Index (E: -0.5) and the Housing Market Index (E: 47.0) as well as two Fed speakers on the calendar Daly (10:20 a.m. ET) and Barr (1:00 p.m. ET).

Finally, there is a 52-Week Treasury Bill auction at 1:00 p.m. ET that could impact yields and move equity markets and earning season continues with a few noteworthy companies due to report quarterly results today including: BIDU ($1.78), MDT ($1.36), OXY ($0.67).

Bottom line, investors will want to see more “Goldilocks” data to contradict last week’s “whiff of stagflation,” and a less hawkish tone from Fed officials. Additionally, stabilizing yields and solid earnings would offer added tailwinds for equity markets at the start of the holiday-shortened trading week.

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What the January Barometer Says for Markets in 2025

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What the January Barometer Says for Markets in 2025: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the January Barometer Says for Markets in 2025

Futures are slightly lower as markets digest lingering tariff uncertainty and despite better than expected economic data.

The only notable economic report overnight was Euro Zone Flash GDP and it beat estimates, rising 0.1% vs. (E) 0.0%.

On tariffs, the lack of detail and action on reciprocal tariffs was a relief but a “tariff cliff” has formed on or around April 1st and that uncertainty will stay a market headwind.

Tariff headlines should theoretically slow down for the next few weeks given the various trade studies that need to occur before tariff announcements in March/April, so focus will turn back towards data and there are two notable reports today:   Retail Sales (E: -0.1%) and Industrial Production (E: 0.3%).  As has been the case, Goldilocks data that’s at or slightly under expectations remains the best case for stocks as it implies solid growth but won’t make the Fed less dovish.

There is also one Fed speaker today, Logan at 3:00 p.m. ET, but she shouldn’t move markets.

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What Yesterday’s Hot CPI Means for Markets

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What Yesterday’s Hot CPI Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Yesterday’s Hot CPI Means for Markets

Futures are little changed following a night of mixed economic data and as markets await more details on reciprocal tariffs.

Investors are waiting to learn which countries and what products will be subject to reciprocal tariffs and until that happens (maybe today or Thursday) that uncertainty will be a market headwind.

Economically, UK and EU data was slightly better than expected (UK GDP and Euro Zone IP both beat estimates).

Obviously tariff news could be market moving if we get any specifics on reciprocal tariffs but beyond that, focus will remain on economic data and due to yesterday’s hot CPI, PPI (E: 0.3% m/m, 3.2% y/y) will be the most important report today.  PPI is viewed as a loose leading indicator for CPI, so if PPI runs “hot” look for another rise in Treasury yields and a headwind on stocks.  The other notable economic report today is Jobless Claims (E: 217K) and markets will want to see more Goldilocks readings (so slightly above expectations).

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MMT Chart: S&P Reaches Technical Tipping Point

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MMT Chart: S&P Reaches Technical Tipping Point: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • MMT Chart: Steady Targets Amid Rising Technical Risks
  • Powell Testimony Takeaways – Policy on “Hold” for Now
  • NFIB Shows Fading Optimism Among Small Business Owners

Futures are mixed but little changed and bond yields are flat ahead of today’s critical U.S. CPI release.

Economically, Italian Industrial Production fell -3.1% vs. (E) -0.2% in December which served as a reminder that Europe continues to face significant growth risks.

Traders will be keenly focused on the January CPI (E: 0.3% m/m, 2.9% y/y), and Core CPI (E: 0.3% m/m, 3.2% y/y) release before the bell this morning before focus turns back to Capitol Hill for Powell’s second day of semiannual testimony (10:00 a.m. ET).

A “hot” inflation print is a considerable risk to equities and other risk assets here as hawkish money flows could result in heavy market declines today.

Looking ahead to the afternoon, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET and two additional Fed speakers to watch today: Bostic (12:00 p.m. ET), Waller (5:05 p.m. ET), however CPI and Powell will be the primary market-focus over the course of the session.

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Market Multiple Table: February Update

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Market Multiple Table: February Update: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table (February Update)
  • NY Fed Inflation Expectations

Stock futures are lower and yields are higher after President Trump officially announced 25% tariffs on steel and aluminum imports late yesterday, reigniting global trade war worries.

Economically, the NFIB Small Business Optimism Index fell to 102.8 in January from December’s multi-year highs of 105.1. The headline missed estimates of 104.7 and underscored fading post-election optimism among business owners.

There are no other economic reports today, however there is a 3-Yr Treasury Note auction at 1:00 p.m. ET. Soft demand, and subsequently higher yields could further pressure equities this afternoon with tomorrow’s CPI report in focus.

Additionally, market focus will be on Capitol Hill today as Fed Chair Powell is set to begin his semi-annual Congressional Testimony at 10:00 a.m. ET. We will also hear from the Fed’s Hammack (8:30 a.m. ET) and Williams (3:30 p.m. ET) today. A dovish tone, and further confidence in a soft economic landing will be favorable for equity markets today.

Finally, earnings season continues today with reports from SHOP ($0.43) and KO ($0.51) before the bell and SMCI ($0.54) after the close.

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Discretionary demand for driving fuels, which remains near a 52-week low right now.

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Discretionary demand for driving fuels, which remains near a 52-week low right now.: Tyler Richey Quoted in Morningstar

Oil prices drop on rise in U.S. supplies as tariffs threaten to dent Chinese demand

Refinery utilization rose by 1 percentage point to 84.5%, EIA data showed. The uptick was likely in reaction to a “weather-driven rise in demand for heating oil last week,” which also helps explain the sizeable increase in distillate stockpiles, which include heating oil, said Tyler Richey, co-editor at Sevens Report Research.

However, the trends in the weekly data suggest that demand for oil and refined products has been weak so far in 2025, “and [is] potentially poised to get weaker,” he said. “That is especially true regarding discretionary demand for driving fuels, which remains near a 52-week low right now.”

“If we don’t begin to see signs of firming inflation” with gasoline supplied rising back towards 9 million barrels per day or higher in the weeks ahead, then “WTI futures dropping back below $70 [per] barrel will become rather likely,” said Richey.

Also, click here to view the full MarketWatch article published on Morningstar on February 5th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

This market needs Goldilocks data to continue to hold up

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This market needs Goldilocks data to continue to hold up: Sevens Report Analysts Quoted in Investing.com

Sevens Report jobs preview: The ‘market needs Goldilocks data’

In the latest Sevens Report, analysts highlighted the importance of Friday’s jobs report, stating that “if it’s Goldilocks, it’s going to help support the market amidst all this tariff and policy noise.”

However, if the report is either too strong or too weak, it could introduce further volatility and pressure on stocks.

Sevens Report emphasizes that for markets to remain stable, “this market needs Goldilocks data to continue to hold up.”

Also, click here to view the full article published on February 6th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.